Passa ai contenuti principali

China Market extends fall on talks of less stimulus


Headline indices of the Mainland China equity market closed down for second straight day on Tuesday, 23 April 2019, as profit booking selloff continued after a flurry of comments from policymakers signaled they're less comfortable about adding stimulus. At closing bell, the benchmark Shanghai Composite Index declined 0.51%, or 16.45 points, to 3,198.59 The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.32%, or 23.05 points, to 1,728.86. The blue-chip CSI300 index shed 0.16%, or 6.60 points, to 4,019.01. 

Top-ranking policymaking bodies including the Politburo, the State Council, the central bank and the Central Financial and Economic Affairs Commission have all held meetings in the last two weeks. 

China should fine-tune monetary policy in a pre-emptive way based on economic growth and price changes, according to a top-level meeting reports chaired by President Xi Jinping. Monetary policy needs to be neither too tight, nor too loose and should be fine-tuned in a timely and pre-emptive way based on economic growth and changes in price situations, the Central Financial and Economic Affairs Commission said. The meeting pointed out that it is necessary to strengthen regulation of countercyclical macro policy and strive to put tax cuts and fee reduction in place as soon as possible. Greater efforts should be made to improve business environment, accelerate the upgrading of the economic structure, improve capabilities to innovate in science and technology, and speed up green development. President Xi also stressed targeted efforts to improve weak links in building a moderately prosperous society in all respects. Xi said the country had achieved decisive progress in building a moderately prosperous society in all respects. However, there remain weak areas that should be faced squarely and dealt with targeted efforts. He also called for courage and wisdom to tackle problems and good implementation of the decisions taken at the central economic work conference.

Meeting of the Politburo was interpreted by traders as meaning the economy is on a stable enough footing that extended support isn't needed. People have come to a clear consensus that there won't be any aggressive stimulus that floods the economy with excessive liquidity. The central bank last week gave a signal that supply of cash would be less liberal, when it rolled over only half of the funds coming due through one of its longer-term policy tools, instead offering more seven-day money.

Airline stocks declined on US decision to stop waiving sanctions on buyers of Iran oil. Aviation oil is the largest operating cost for airlines. Crude oil prices jumped more than 2% on Monday on growing concern about tight global supplies after the United States announced a further clampdown on Iranian oil exports. Washington said it would eliminate in May all waivers allowing eight economies to buy Iranian oil without facing US sanctions. International benchmark Brent crude soared 2.9% to settle at $74.04 a barrel on Monday and US West Texas Intermediate crude jumped 2.7% to settle at $65.70. Both indexes climbed to nearly six-month highs during the session. US crude futures last traded at $65.78 per barrel, up 0.4% on the day. China Southern Airlines fell 1.9 per cent to 8.31 yuan and Air China dropped 2.4 per cent to 10.15 yuan. China Eastern Airlines fell 8.2 per cent to 5.49 yuan.

Pork-linked stocks rallied as China officials predict 'significant' increase in pork prices. A "significant" increase in pork prices is ahead in the second half of this year, likely exceeding the record high in 2016, senior officials from the Ministry of Agriculture and Rural Affairs said at a news conference. The outbreak of African swine fever beginning last August has led to 1.02 million pigs being killed. During the first week of April, the price of pork has increased 17.4% from March, at 15.15 yuan per kilogram. Compared to a year-ago, the price increase is 36%, an official was quoted as saying. Tangrenshen Group (002567 CH) jumped 4.1% to 18.15 yuan, and Tecon Biology (002100 CH) shot up 6% to 12.02 yuan. 

CURRENCY NEWS: China's yuan was little changed against the U.S. dollar on Tuesday, as soft mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.7082 per US dollar, weakened by 47 bps than the previous fix of 6.7035. In the spot market, the yuan opened at 6.7105 per dollar and was changing hands at 6.7123 at midday, only 1 bps weaker than the previous late session close.



Fabrizio 

Commenti

Posta un commento

Post popolari in questo blog

Fwd: The Looming Bank Collapse The U.S. financial system could be on the cusp of calamity. This time, we might not be able to save it.

After months  of living with the coronavirus pandemic, American citizens are well aware of the toll it has taken on the economy: broken supply chains, record unemployment, failing small businesses. All of these factors are serious and could mire the United States in a deep, prolonged recession. But there's another threat to the economy, too. It lurks on the balance sheets of the big banks, and it could be cataclysmic. Imagine if, in addition to all the uncertainty surrounding the pandemic, you woke up one morning to find that the financial sector had collapsed. You may think that such a crisis is unlikely, with memories of the 2008 crash still so fresh. But banks learned few lessons from that calamity, and new laws intended to keep them from taking on too much risk have failed to do so. As a result, we could be on the precipice of another crash, one different from 2008 less in kind than in degree. This one could be worse. John Lawrence: Inside the 2008 financial crash The financial
Posta un commento
Continua a leggere

3 Reasons Why Gold Will Outperform Equities And Bonds

3 Reasons Why Gold Will Outperform Equities And Bonds https://www.forbes.com/ 3 Reasons Why Gold Will Outperform Equities And Bonds For centuries, gold has played a major role in human history and has become interwoven into the financial fabric of society. Beyond its investment following, gold has become synonymous with wealth. Historically, gold's early use cases revolved around money – a form of "medium of exchange". After the second world war however, several countries and their respective currencies, started to shift away from the gold standard and migrated towards a fiat currency system. Today, gold remains largely a "Store of Value", and due to its unique properties and large number of use cases, it has managed to distance itself from other asset classes in terms of correlation, demand / supply drivers, and investment purpose. Gold's idiosyncrasies function as a double-edged sword, as it is challenging to predict
Posta un commento
Continua a leggere

What Will Stocks Do When “Consensual Hallucination” Ends?

The phenomenon works – until it doesn't. What's astonishing is how long it works. There is a phenomenon in stock markets, in bond markets, in housing markets, in cryptocurrency markets, and in other markets where people attempt to get rich. It's when everyone is pulling in the same direction, energetically hyping everything, willfully swallowing any propaganda or outright falsehood, and not just nibbling on it, but swallowing it hook, line, and sinker, and strenuously avoiding exposure to any fundamental reality. For only one reason: to make more money. People do it because it works. Trading algos are written to replicate it, because it works. It works on the simple principle: If everyone believes stocks will go up, no matter what the current price or the current situation, or current fundamental data, then stocks will go up. They will go up because there is a lot of buying pressure because everyone believes that everyone believes that prices will go up, and so they bid up
Posta un commento
Continua a leggere